OneSpaWorld (NASDAQ:OSW) and H&R Block (NYSE:HRB) Financial Contrast

H&R Block (NYSE:HRB) and OneSpaWorld (NASDAQ:OSW) are both mid-cap consumer discretionary companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, valuation, institutional ownership, analyst recommendations, dividends, earnings and profitability.

Volatility & Risk

H&R Block has a beta of 0.38, meaning that its share price is 62% less volatile than the S&P 500. Comparatively, OneSpaWorld has a beta of 0.9, meaning that its share price is 10% less volatile than the S&P 500.

Earnings & Valuation

This table compares H&R Block and OneSpaWorld”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
H&R Block	$3.95 billion	1.59	$733.60 million	$5.72	8.94
OneSpaWorld	$1.03 billion	2.99	$71.62 million	$0.84	35.98

H&R Block has higher revenue and earnings than OneSpaWorld. H&R Block is trading at a lower price-to-earnings ratio than OneSpaWorld, indicating that it is currently the more affordable of the two stocks.

Dividends

H&R Block pays an annual dividend of $1.84 per share and has a dividend yield of 3.6%. OneSpaWorld pays an annual dividend of $0.25 per share and has a dividend yield of 0.8%. H&R Block pays out 32.2% of its earnings in the form of a dividend. OneSpaWorld pays out 29.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. H&R Block has increased its dividend for 9 consecutive years. H&R Block is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

90.1% of H&R Block shares are held by institutional investors. Comparatively, 96.0% of OneSpaWorld shares are held by institutional investors. 0.7% of H&R Block shares are held by insiders. Comparatively, 3.6% of OneSpaWorld shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings for H&R Block and OneSpaWorld, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
H&R Block	1	2	1	1	2.40
OneSpaWorld	0	1	5	0	2.83

H&R Block currently has a consensus price target of $46.67, suggesting a potential downside of 8.71%. OneSpaWorld has a consensus price target of $34.00, suggesting a potential upside of 12.51%. Given OneSpaWorld’s stronger consensus rating and higher possible upside, analysts plainly believe OneSpaWorld is more favorable than H&R Block.

Profitability

This table compares H&R Block and OneSpaWorld’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
H&R Block	18.59%	-214.84%	22.56%
OneSpaWorld	8.26%	19.00%	14.93%

Summary

OneSpaWorld beats H&R Block on 10 of the 18 factors compared between the two stocks.

About H&R Block

H&R Block, Inc. engages in the provision of tax return preparation solutions, financial products and small business solutions. The company was founded by Henry W. Bloch and Richard A. Bloch on January 25, 1955, and is headquartered in Kansas City, MO.

About OneSpaWorld

OneSpaWorld Holdings Limited operates health and wellness centers onboard cruise ships and at destination resorts worldwide. Its health and wellness centers offer services, such as traditional body, salon, and skin care services and products; self-service fitness facilities, specialized fitness classes, and personal fitness training; pain management, detoxifying programs, and body composition analyses; weight management programs and products; and medi-spa services. The company also provides its guests access to beauty and wellness brands, including ELEMIS, Grown Alchemist, Kérastase, Dysport, Restylane, Thermage, CoolSculpting, truSculpt 3D, truSculpt iD, Good Feet, and Hyperice with various brands offered in the cruise market. The company is based in Nassau, Bahamas.